By Aaron Kesel
After the coronavirus caused China to shut down most of its businesses, and cities, the country is now striking back hard by releasing a digital currency and national blockchain.
China’s central bank The People’s Bank Of China, began testing its new digital Yuan’s interface on April 14th with one of its largest banks, the Agricultural Bank of China, rolling out a test UI. Two weeks later, there are reports that a pilot has been launched. Nineteen restaurants and retail establishments including popular Western restaurant chains like Starbucks, McDonald’s and Subway are participating in the test, Bitcoin.com reported. The test run is taking place in at least four cities in China—Shenzhen, Suzhou, Chengdu and Xiong’an, according to China’s central bank which confirmed the test of its new digital Yuan officially called “Digital Currency Electronic Payment (DCEP)” to the Wall Street Journal.
That’s not all, China also launched its Blockchain Service Network (BSN) for domestic and global commercial use. China also announced a 71-person committee for its Blockchain which includes executives from China’s central bank, as well as tech giants Baidu and Tencent, according to an announcement from the country’s Ministry of Industry and Information Technology (MIIT.)
Last year, Max Keiser of the Keiser Report told Kitco News that China was backing the new digital Yuan with gold.
“[China] is rolling out a cryptocurrency, a lot of the details have not been divulged. I can tell you that the cryptocurrency that China’s rolling out will be backed by gold. It’s a two-pronged announcement. Number one, China’s got 20,000 tonnes of gold, number two, we’re rolling out a crypto coin backed by gold, and the dollar is toast,” Keiser told Kitco News.
This author also had his own source from the Bank for International Settlements (BIS) saying much of the same for years, in which I wrote up two articles explaining the shift from the West as the world reserve currency. Those articles were entitled: “A Shift Of Power: Russia and China Finalize Moves To Replace U.S. Dollar As World Reserve Currency” and “China Finalizes Moves On Oil Markets To Overthrow U.S. Petro-Dollar Dominance As World Reserve Currency.”
Both articles detail numerous financial moves that China has taken in the past 10 years. One of which was buying up gold from the U.S. as a WikiLeaks cable titled “China increases its gold reserves in order to kill two birds with one stone” details.
China again began stockpiling gold in 2013, when they bought JPMorgan’s building that previously housed its gold. The IMF and United Nations have even expressed agreement that it’s time to replace the U.S. dollar as the world reserve currency with what’s known as SDRs or special drawing rights . Then the Asian Infrastructure Investment Bank (AIIB) was planned between 2010-2012, and was fully operational by 2016.
“China has been pushing for the SDR to become more widely used for some time, as a way to challenge the dominance of the dollar without pushing the renminbi as a direct competitor,” Julian Evans-Pritchard, a China economist at Capital Economics in Singapore, told Reuters.
Although currently it is not known if China’s digital Yuan is backed by gold, it wouldn’t be at all surprising. China opened up its own gold market in 2016, an entirely separate system than the COMEX gold futures market in New York and the Over-the-Counter (OTC) trades cleared through the London Bullion Market. China and Russia have both been working to undermine the West and the U.S. dollar since China called for a new world reserve currency as early as 2009.
Now, the disruptive fiat digital Yuan is here and it could help China achieve their goal of replacing the U.S. dollar as the world’s reserve currency amid a growing economic collapse happening in the U.S. due to the coronavirus lockdown and other outlying factors like propping the economy up on fraud by deregulating banks and entities. It is China’s time to shine as the petro dollar is in its last death throes with oil plunging almost -$40, a historic move, and releasing a digital currency will force the rest of the world to follow or be left behind. In the words of Fortune magazine, “digitization of currency will be perhaps the most important factor in an economy’s success,” and “China is winning the digital currency battle by a long shot—and if the U.S. doesn’t catch up soon, it’s going to lose the war.”
While many see the release of the Chinese fiat cryptocurrency as bullish for Chinese-based blockchain projects, the outlying effect is that such a move by China is Orwellian. The Chinese now have a digital currency which, when it is fully rolled out, will be able to track all point-of-sale purchases. China’s new digital currency couldn’t be further from the original foundation and purpose of Bitcoin and cryptocurrency which is freedom from centralized structures through decentralized ownership. In other words, you control your own funds and no one can restrict them. However, with China’s new recent move we can surely expect that the Chinese government will be able to seize digital funds or turn off a person’s wallet if they disobey the Chinese Communist Party (CCP.)
This is assumable due to the Orwellian rules already in place in China with the social credit system and restrictions on traveling throughout the country by using that mechanism to silence critics of the CCP.
China isn’t the first country to test a Central Bank Digital Currency (CBDC), a consortium of banks tested digital cash in 2016 in a Wall St test run, which didn’t get much fanfare. China is also not the only country developing a digital currency, the UK is developing one as well, CoinTelegraph reported. Besides the UK, the U.S., Russia, and India to name a few countries, are also considering launching their own CBDC, or fiat cryptocurrency. BIS states that future is now inevitable in a PDF from January of this year compiled of research of more than 50 Central Banks polled entitled: “Impending arrival – a sequel to the survey on central bank digital currency.”
The poll indicates that as many as “80% are engaging in some sort of work with developing digital fiat currencies, while 40% have progressed from conceptual research to experiments, or proofs-of-concept; and another 10% have developed pilot projects.”
The main questions we must ask ourselves is this: do we want world governments having that much power and Orwellian control over our finances, with the ability to not only see purchases but seize wallets if you dissent and decide what you can and can’t purchase? I think the obvious blaring answer for most of us is, no. In other words, buy Bitcoin.
Aaron Kesel writes for Activist Post.
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